Thanks for reaching out.
I understand that you are looking to assign "Group Administrator" Azure AD role to the service principal to manage Azure AD groups.
You can directly assign the Azure AD role to service principal as well. By default, Azure Ad applications will not display in the available options, you have to type and select it.
To assign Azure AD role to service principal, Go to Azure AD -> Roles and administrators -> Select the role you want to assign to Service principal.
Go to Assignment ->Add Assignments-> Select the application to which you want to assign the Azure AD role.
Service principal has been successfully assigned to Azure AD role as shown here:
Here applications are allowed for "Active assignment" only.
Hope this will help.
Thanks,
Shweta
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